Travel stocks lower in Europe

Broader markets hit by U.S. jobless figures

LONDON (CBS.MW) -- Travel stocks were in decline in Europe markets Friday as overnight terror attacks and oil price worries weighed, and the broader market turned lower on weaker jobs growth in the U.S. during September than anticipated.

The weak U.S. jobs report was a double whammy for European companies, as the data not only signals potential concerns for U.S. consumption but also weakened the dollar vs. the euro, making it less lucrative for European companies to export to the U.S.

The euro was last at $1.2412 in late-session trade, up around 1 percent vs. the greenback.

The German DAX Xetra 30 index (1876534) fell 0.7 percent at 4,015 and the French CAC 40 index (1804546) fell 0.6 percent at 3,737 after September non-farm payrolls grew by just 96,000, missing Wall Street forecasts by around 50,000 jobs.

On the European economic front, production in the euro area will grow by 1.8 percent in 2004, up from a previous forecast of 1.4 percent, the European Forecasting Network, a group of European research institutions focusing on eurozone economics, said in a report presented in Brussels Friday.

"While economic activity picked up markedly during the first half of 2004, a strong upswing has not been realized because investment growth has continued to be very slow," the report said.

The French Prime Minister also sounded upbeat about growth, saying the country's economy may grow at a 2.6 percent clip in 2004.

Lufthansa lower as CFO questions target

Of movers, Deutsche Lufthansa (823212) fell 1.7 percent after CFO Ludwig Kley told the Financial Times Deutschland said it would be difficult to achieve its 300 million euro operating profit target for 2004 due to high oil prices. The company reiterated the forecast after the interview.

A terror attack in the Sinai that killed 19 people and injured several more on Thursday night as well as an explosion in Paris outside the Indonesian Embassy also weighed on travel stocks, with French hotels group Accor (012040) and cruise operator Royal Caribbean (RCL) each falling over 1 percent.

Of other stocks in focus, Dutch telecom KPN (00908)
KPN, +1.78%
ended 1.9 percent weaker after early gains. It said it was cutting 750 jobs in its EnterCom fixed-line division, blaming a slow economy, price erosion and growing competition. The reductions, not part of a 800 job cut reduction unveiled in January, will force KPN to take a charge of 25 million euros. Of the cuts, 140 jobs will be eliminated immediately, with the remaining in 2005.

DaimlerChrysler (710000)
DCX
fell 1 percent. It said it is taking a charge of close to $500 million for recalls at its majority owned Fuso division, but reiterated a commercial vehicles forecast due to stronger growth outside the Fuso division. See story on Fuso charges.

Unit sale plans at LVMH, deal for Air Liquide

Air Liquide (012007) eased 1 percent after agreeing to sell $600 million in industrial gas assets to Praxair
PX, +0.78%
Air Liquide needs to sell the businesses, the southern portion of the Rhine/Ruhr pipeline and the Saar pipeline, plus bulk distribution and packaged gas unites, as part of its purchase of Messer Griesheim in Germany.

Smith Barney Citigroup said the deal could be a sign of interest in buying into the German economy.

"Praxair's acquisition of Air Liquide's German assets frankly surprises as PX, which is historically acquisition-shy, is going into a low-growth region. In fact, German companies themselves are looking for growth elsewhere. Could PX be making a shrewd counter-cyclical bet on Germany?"

Merrill Lynch didn't share that view. "Some in the market had feared that Air Liquide would be not able to achieve good prices," the broker said.

ING (30360)
ING, -0.96%
eased 0.4 percent. It agreed to buy the Canadian property and casualty units of German insurer Allianz (840400)
AZ, +3.44%
for an undisclosed price.

Nestle (001205604) rose 0.6 percent. Following Nestle Waters lifting its threat to dispose of its Perrier division on the intervention of the French Finance ministry on Sept. 28, Nestle Waters President Richard Girardot said in an interview with French daily La Tribune Friday that he now wished the government would to stay out of the negotiations. As a veiled threat to the communist-backed CGT union that has shown little willingness to cooperate with the restructuring plan, Girardot added, "We need responsible social partners."

Converium
CHR, +0.61%
shares eased 0.4 percent in Swiss trade amid announcing that it was being probed by the U.S. Securities and Exchange Commission for insider trading. The SEC is probing trading ahead of its second quarter profit warning.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.